CPI falls for the first time in 7 months

As prices of vegetables rose at a slower pace, retail inflation fell for the first time in 7 months to 6.58% in February compared with 7.59% in the preceding month. The recent data from the Ministry of Statistics and Program Implementation revealed that this was aided by a cooling off in inflation in food and beverages to 9.45% against 11.79% in January, led by a modest rise in prices of vegetables. Vegetable prices increased 31.61% compared with 50.19% in January.

“A broad weakness in demand, normalization of elevated perishable food items, as well as sharp cuts in cooking gas and transport fuels are the key drivers of the fall in retail inflation,” stated Rahul Bajoria, chief India economist at Barclays.

Core inflation, however, remained steady at 4.03% in February compared to 3.92% last month.